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Wednesday, October 22, 2014 |  Madison, WI: 36.0° F  Fog/Mist
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Low-income property tax issue spurs 'tent city' protest at Capitol

Credit:Jason Joyce

In a protest Tuesday at the state Capitol, nonprofit groups tried to pressure the state Legislature into guaranteeing tax-exempt status for providers of low-income housing.

The groups billed the protest as a "tent city," but with only four tents set up on the sidewalks, it was more a tent alcove. Still, about 100 people attended, including some disabled people who might lose housing. Organizer Dean Loumos, executive director of Housing Initiatives, told the crowd: "We're the kind of citizen lobbyists they need to see more of."

In a court case last year, the city of Madison successfully argued that to qualify for a property tax exemption, nonprofits can only use rental income for maintenance or construction debt. Housing providers say they use rent income for all sorts of management costs and that they cannot afford to pay property taxes. Some say they might have to close their doors if forced to pay - putting hundreds of low-income people out on the streets.

"One of the biggest reasons people with disabilities have been forced into institutions is the lack of affordable housing," said a wheelchair-bound Steve Verriden of Wisconsin Adapt, a disabled-rights activist group. "They're taking away one of the only tools we have left."

State Rep. Terese Berceau (D-Madison) was at the rally but didn't address the crowd. She's been trying to get the Legislature to understand the urgency of granting the exemption. She drafted a bill to ensure that housing for low-income people is exempt.

But part of what has kept the Legislature from acting on this issue is debate over which groups deserve the exemption. According to Berceau, "Everybody and his brother wants a tax exemption for property, and the cities just can't go there."

Still, Berceau is frustrated by the lack of progress: "I'm tired of waiting for people to decide when we have people in real jeopardy of losing their homes. We can't all come to agreement so let's solve it for the groups who need it the most. Then we can look at the other folks."

Berceau wants to meet with Gov. Jim Doyle to get an idea of what he'll support.

Linda Ketcham, executive director of Madison-Area Urban Ministry, told the crowd that a study by the state found that property taxes fall disproportionately on the poor. The poorest 20% of the population pay 5.4% of their income on property taxes, while the richest pay 4%, she said. Ketchum called the property taxes, like the recent Madison bus fare increase, another example of government balancing "budgets on the backs of poor people."

Loumos admitted the protest, hastily organized, was small, but vowed to be back next month if the Legislature doesn't act: "By not fixing this and not supporting the tax exemption, they've made affordable housing unaffordable, which increases homelessness."

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